Salaries and perks

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2014 A person is receiving HRA and also enjoying facilities of Rent Free accomodation from the same employer.

Can he claim any exemption for HRA under Section 10(13A)of Income tax act, 1961 or the whole HRA is taxable as he is also having RFA ?

Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2014 Please reply soon.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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22 July 2025 Good question!

When an employee receives both HRA and Rent-Free Accommodation (RFA) from the same employer, the tax treatment is as follows:

HRA exemption under Section 10(13A) is allowed only if the employee actually pays rent to a landlord (third party).

If the employee is getting Rent-Free Accommodation (RFA) from the employer, then HRA exemption is generally not allowed, because there is no rent payment made by the employee.

Moreover, RFA is itself a taxable perquisite under the head “Salary” and taxed on the basis of its valuation (depending on city and salary).

So practically:
HRA received will be fully taxable if the employee also enjoys rent-free accommodation.

The value of rent-free accommodation will be added to taxable salary as per perquisite valuation rules.

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